It will kick in in October 2012, but now is the time to start thinking about it if you are considering doing any renovation work in the next two years, so you don't lose out.

A modest rate of interest will be charged on the loan and the capital sum will be paid back over many years through a supplement on the normal energy bill for the property in question.

The benefit to consumers is that, with this upfront investment that the state has subsidised, they can start saving energy, carbon and money straight away.

The Renewable Heat Incentive

The RHI does for heat what the feed-in tariffs are doing for renewable electricity.

It is letting many people install things like heat pumps and solar water heating and get paid for generating heat, even if they only use it for themselves.

Payments will continue for 20 years.

Tariff levels

The Renewable Heat Incentive (RHI) for non-domestic (business) generators has been open for applications since November 2011 and has the following rates:

Small biomass boilers/stoves up to 200kWh: 7.6p/kWh

Solar thermal water heaters up to 200kWh: 8.5p/kWh

biomass boilers/stoves 200-1,000kWh: 4.7p/kWh

biomass boilers/stoves over 1,000kWh: 2.6p/kWh

Ground source heat pumps under 100kWh: 4.3p/kWh

Ground source heat pumps over 100kWh: 3p/kWh

Biomethane (anaerobic digestion) under 200kWh: 6.5p/kWh

For example, Elaine Robinson has installed a 4.3kW ground source heat pump to supply heat to one of her three holiday lets. It sends hot water to the underfloor heating.

The heat pump has been accredited under the Microgeneration Certification Scheme (MCS), and has a 'Coefficient of Performance', a measure of its efficiency, which is better than that required by the RHI conditions.

It will benefit from the ‘small commercial heat pumps’ tariff and receive quarterly payments for the heat generated for the next twenty years, which she estimates will bring in ￡500 a year.

"This is a substantial operational cost saving," she says, as it replaces the high and rising cost of heating oil or LPG. But with an installation cost of ￡8-9000, "you've got to be in it for long term," she advises.

This topic is discussed in the heating chapter available on the downloads page.

The full tariff details are on page 52 of this document explaining the RHI

More on the Green Deal

The Green Deal will unlock about £7 billion of private sector investment. That should generate 100,000 jobs.

Many companies will want to take advantage of the Green Deal. There will be salesmen trying to persuade property owners and occupiers to use their services.

It therefore pays to educate yourself a little about what works in order to avoid expensive mistakes and get real value for money in terms of energy savings, before obtaining three comparable quotes.

That is the purpose of this website. The information available here is not expensive in comparison to the money that you will save.

NOTE: David Thorpe and Green Deal Advice are not liable for the consequences of any decisions made after reading the information on this website.

Green Deal FAQs

How will the Green Deal work?

An energy survey will be carried out on your home. The necessary measures are evaluated and costings produced.

Finance will be provided by a range of accredited providers.

The cost of the measures will be calculated to be less than the savings achieved by the measures applied - known as the 'golden rule' - and will be financed by applying a pre-agreed charge to the building's electricity bill

The government says that there will still be enough cash left over for occupiers to experience reduced bills as well.

The length of the repayment period can be adjusted to make the golden rule work - up to 25 years in some cases.

As the repayment is attached to the building's electricity meter, any remaining debt will be inherited by the next owner of the building, who must continue the repayments on the same terms.

Assessment can only be done by UKAS-accredited certification companies in much the same way as EPCs are presently don, i.e. a competent person who has been trained and is certificated

Assessments will not be free, but usually carried out as a loss-leader by companies who are also providing the installations.

Unlike the present system there will be a requirement for schemes to comply with British Standard EN 45011 and for installation to be under a Publically Available Standard now under consultation (PAS 2030) which will define the skills required through National Occupational Standards (NOS).

What are the doubts?

Others wonder how sufficient repayment can occur to the lenders from electricity bill savings and how they can reliably be claimed back over 25 years.

And there are questions about whether the work that could be carried out on properties will be of good enough quality to be effective, and save a sufficient amount of carbon emissions to help homes contribute their share of the 80% reductions required on all the U.K.'s emissions by 2050.

What if you're poor?

It doesn't matter. The Energy Act also requires energy companies to help fuel poor consumers under the Energy Company Obligation (ECO).

This will particularly target hard-to-heat homes and solid walled properties, and make them install smart meters, which will save you money, and make information on energy bills easier to understand.

Who will deliver it?

The Green Deal will be attractive to large organisations, but the processes for subcontracting specialist installation services, in compliance with the code of conduct, needs to be developed.

A number of local authorities are gearing up to deliver Green Deal schemes themselves, including Birmingham City Council and a cluster in the North East led by Newcastle City Council.

Councils are trusted and in a prime position to accept this responsibility.

They would also be in a good position to recover the loan repayments, as they already have a property-based system in place for council tax collection.

How much will be available?

The amount of the loans offered to households is expected to be up to £10,000.

Will the finance be sufficient?

Wrapping homes in external insulation and replacing windows costs considerably more than £10,000 per house.

The best way to do the job effectively is to have a definite target for the airtightness and insulation value of the whole house, and to implement all the measures required at once.

This is because most homes are only renovated once every 30 years on average. Therefore not to do as much as possible while the builders are in, is a wasted opportunity and a wasted cost.

It is ideally necessary to spend between £30,000 and £50,000 per property, or one fifth the value of the property, if the total emissions and energy savings to be generated will be enough to meet the UK's carbon reduction targets. This is according to research done so far by pilot projects funded through the Technology Strategy Board as part of The National Refurbishment Centre and the Retrofit for the Future programme.

How will the assesment work?

The Government has issued a list of Qualifying Improvements, measures that will qualify for support.

The estimated savings from these measures and improvements have been included within new versions of the software used by assessors, RDSAP for dwellings, and SBEM and other compliance tools for non-domestic buildings.

The software will model the building, and some lifestyle factors, and rank the best options. It is likely that more than one option will be suggested in each case.

The building owner can then use this to get quotations from contractors for the works.

However, there is a fundamental shortage of hard data on the as-installed performance of many qualifying measures; and the complexity of multiple measures and their interactions are also not well understood.

There are doubts about whether installations will be up to standard and how this will be checked against expected performance.

Improving very poorly insulated or serviced buildings may have the result that occupants could accept a gain in personal comfort as opposed to savings on energy bills under the ECO; but how will this be financed?

A major issue is that the mechanisms for including wider scheme measures don't yet exist.

What if I can't do everything at once?

Then the optimum strategy is to have a long term plan for the property and not make earlier modifications that will preclude what will be done later.

There are cheaper deals than the Green Deal

While the Green Deal offers a loan of 7%, you can get a 0% loan for home energy efficiency from the Co-operative Bank. >> Read more.

How to make your home energy efficient articles on the Superhomes website:

Is draught-proofing for airtightness a good thing?

Draught-proofing gives you quick wins for energy and cost saving. But with up to half of all heat loss in buildings being potentially due to uncontrolled ventilation and wind, you need to learn about extreme draughtproofing!

Other, older articles

The Green Deal begins todayMon, January 28, 2013: Read more.
Green Deal loans to be underwritten by Government Sun, August 12, 2012: Read more.
Government sets out its unambitious terms for Green Deal Tue, June 12, 2012 The Government has set out the parameters of the Green Deal energy efficiency scheme, which have been met with a critical response from the industry and consumer groups. Read moreNew Green Deal body set up Fri, May 4, 2012
The Energy Efficiency Partnership for Buildings has been set up to be the largest network of potential Green Deal providers, financiers, product and service suppliers in the UK. Read MoreTHE GREENEST INSULATION : A huge opportunity to reduce atmospheric carbon may be about to be lost Tue, March 13, 2012: This very important post explains what is the best insulation to use (wood fibre board internal and external insulation with lime render), why, and why Green Deal installers may pressurise consumers to use the wrong kind: fossil fuel based polystyrene insulation.
Read more.
￡3.5m for Green Deal apprenticeships Thur, March 8, 2012: The Coalition Government has announced a new fund of ￡3.5m to train Green Deal assessors and installers, and a further ￡10m to improve the energy efficiency of non-domestic buildings.
Read more.
″All business should be green businesses″ says the Business Department Thur, March 1, 2012: Phil Wynn Owen, Director General of International Climate Change and Energy Efficiency at the Department of Energy and Climate Change (DECC), said his department had been inundated with lobbying by manufacturers of energy efficiency equipment anxious to get on the approved list for funding under the Green Deal.
Read more [scroll down for this].
Personal carbon trading "could fill the Green Deal gap"Wed, January 25, 2012: Personal carbon trading is at the heart of a new proposal from academics to reducing energy use in buildings and help meet the aims of the Green Deal. Read more.
Community energy schemes receive funding but mixed messages from Government Monday, January 16, 2012: The first 82 local energy projects run by communities throughout England have won funding from the Government's ￡10m Local Energy Assessment Fund (LEAF). Read more.
First businesses get Ofgem approval for renewable heat tariff January 6, 2012: Two businesses have become the first to benefit from the new tariff support scheme to help businesses use low carbon heat, both of which are using ground source heat pumps.Read more.
Chaos envelops Coalition's green policiesThursday, December 22, 2011: With the Committee on Climate Change also saying this week that there is no way the Green Deal will work, as presently designed, Government plans to reduce UK carbon emissions are falling into disarray. Read more.
Huhne claims that the Green Deal will cut business energy bills Friday, November 25, 2011: The Green Deal will "kickstart £14bn investment over the next decade, supporting at least 65,000 insulation and construction jobs by 2015", Energy Secretary Chris Huhne claimed yesterday as he launched consultations on key areas of climate and energy policy enshrined in the Energy Act 2011. Read more.
Fuel poor targeted by renewable heat trialsFriday, November 18, 2011: Social housing tenants across the country are to receive £4m in the start of a trial that will help prepare for next year's Renewable Heat Incentive (RHI).Read more.
Huhne blasts critics of renewable energy as RHI gets go-ahead
Tuesday, October 26, 2011:
Energy Minister Greg Barker announced that state aid approval has been granted by the European Commission for the Renewable Heat Incentive (RHI), enabling it to be launched for commercial purposes.Read more.
This is the way to eliminate fuel poverty Monday, October 31, 2011:
Thousands of lives could be saved by giving energy bill rebates to the fuel poor that are conditional on having smart meters, advice, energy audits and eco-refits. Read more.
No more PV subsidy for energy inefficient buildings - Barker Friday, October 28, 2011:
Greg Barker has told the domestic solar industry that all new domestic PV sites from April 2012 must meet minimum energy efficiency standards. Read more.
The Green Deal will fail under current arrangementsFriday, September 16, 2011:
The Green Deal, flagship of the Government's Energy Bill and intended to help the housing sector contribute to cutting UK carbon emissions by 80% by 2050, is likely to be underfinanced and will fail by not attracting enough support from residents. Read more.
All non-domestic buildings should have Display Energy CertificatesFriday, August 12, 2011: Forcing all commercial buildings to display data on their energy performance would bring huge economic as well as environmental savings. Read more.
Microgeneration may be eligible for £10,000 Green Deal support Monday, June 06, 2011: The Green Deal, the Government's flagship scheme for giving buildings £10,000 of energy-saving improvements, will include microgeneration technologies like heat pumps and solar power. Read more.
Energy Bill will fail to deliver Green Deal - MPs Thursday, May 12, 2011: The Government's Energy Bill came under attack at its second reading in the House of Commons on Tuesday for being great on rhetoric but short on the kind of detail which will get the job done on time. Read more.